Bill’s By The Number$

Posted by: Kim Vo | Posted on: September 6th, 2016 | 0 Comments

1. NINE vs. THREE – In the last 25 years (1991-2015), the S&P 500 has gained more on a total return basis during the 4th quarter (i.e., the months of October-November-December) than the index has gained during the other 3 quarters combined. Over the last 25 years, the final 3 months of the year have gained +246.9% (total return) vs. a gain of +199.6% for the first 9 months of the year. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. DEPENDS – An individual with $1 million invested 100% in the S&P 500 as of 1/01/73 withdrawing an inflation-adjusted $100,000 per year would be out of money in 9 years. A second individual with $1 million invested in the S&P 500 as of 1/01/82 withdrawing an inflation-adjusted $100,000 per year would have an accumulation of $4.26 million remaining after 34 years, i.e., as of 12/31/15. This calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance. Actual results will fluctuate with market conditions and will vary (source: BTN Research).

3. MORE THAN TWO-THIRDS – The total return of the S&P 500 over the last 5 calendar years (2011-2015) is +80.7% (total return). The best 13 trading days during the 5 years (i.e., 13 days out of 1,258 total trading days) produced a +55.1% gain. Thus, 1% of the trading days over the last 5 years were responsible for 68% of the index’s total return (source: BTN Research).

4. BETTING ON LAST YEAR’S WORST – An equal investment taken at the end of the trading day on 12/31/15 in the 10 worst performing individual stocks within the S&P 500 from calendar year 2015 is up +40.2% YTD through 8/31/16 (source: BTN Research).

5. CHASING LAST YEAR’S WINNERS – An equal investment taken at the end of the trading day on 12/31/15 in the 10 best performing individual stocks within the S&P 500 from calendar year 2015 is down 2.3% YTD through 8/31/16 (source: BTN Research).

6. THE BEST DAYS – The 3 best percentage gain days for the S&P 500 in the last 66 years (i.e., dating back to 1950) all occurred during the month of October (source: BTN Research).

7. ONE OPTION – 36% of the “geographic rating areas” in the USA are projected to have just 1 health insurance company offering coverage through state health insurance exchanges in 2017 (source: Avalere Health).

8. MONEY COMING IN – Tax receipts for fiscal year 2016 (i.e., the 12 months that will end on 9/30/16) are projected to be 17.8% of the size of the US economy. Tax receipts (as a percentage of the economy) have exceeded 17.8% only 20 times in the last 85 years (source: Office of Management and Budget).

9. CONTRIBUTE MORE – The largest public pension fund in the United States (the California Public Employees’ Retirement System) voted in March 2012 to reduce its discount rate from 7.75% to 7.50%, a change that required the pension fund to contribute an extra $303 million a year. In November 2015, CalPERS announced plans to further reduce its discount rate to 6.50% over the next 3 decades (source: CalPERS).

10. ENOUGH? – Just 1 in 7 workers surveyed (14%) have accumulated retirement assets of at least $250,000 not counting the value of their primary residence or the present value of any pension plan they have (source: EBRI).

11. RARELY – The Fed has raised rates between September 1st and Election Day just 1 time in the last 40 years. That single rate hike was a bump of ¼ of 1% initiated by Alan Greenspan on 9/21/04 (source: Federal Reserve).

12. WHY SO LONG? – An individual stock trade “settles” in 3 business days, i.e., the stock buyer must deliver cash and the stock seller must deliver the securities within 3 business days. 1 year from today (9/05/17), an individual stock trade will “settle” in just 2 business days (source: Securities and Exchange Commission).

13. IN JUST ONE YEAR – The US government reported a national debt of $18.151 trillion as of 8/31/15. The US government reported a national debt of $19.510 trillion as of 8/31/16 (source: Treasury Department).

14. WEST COAST WATER – 21% of California is currently experiencing an “exceptional drought,” down from 46% a year ago. Drought conditions are measured on a continuum from “moderate” to “severe” to “extreme” to “exceptional” (source: U.S. Drought Monitor).

15. IN THE FAIRWAY TOO – PGA golfers have hit 8 drives of at least 400 yards during the 2016 season through Sunday 8/28/16. Justin Thomas has the season’s longest drive at 414 yards (source: PGA).

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